1. Market Access in Europe
Some EU overviews and England as a worked example
Christian Hill and Mark Harries
MAP BioPharma

3. Why are there differences amongst Member States?
Differential pricing in EU
© Can Stock Photo Inc. / RTimages

4. Differences across the EU make Market Access efforts complicated, but are possible with effective coordination

5. Differences across the EU
Medicine prices differ across EU due to factors which are often beyond control of companies:
Price setting by authorities – national, not EU competence, National health and pharma policies and priorities, Wholesale / pharmacy margins, VAT rates, Pack sizes and distribution channels, Exchange rate fluctuations
Member States compare and sometimes reference their prices to other countries prices. Such comparisons must be performed with great caution to avoid unanticipated impact
IRP – choice of country basket should take differences between Member States into account:
Purchasing power, GDP per capita; Germany recently decided to include the Czech Republic, Slovakia and Greece in the country basket…The German price is again referenced by 19 other Member States*
*P. Kanavos et al for European Parliament, ENVI „Differences in costs of and access to pharmaceutical products in EU”, 2011, p.80

6. Price Differences between Member States: Reasons and Importance
Nationally dependent variables mean that prices are not directly comparable among Member States
wholesale / pharmacy margins, VAT rates, different pack sizes, distribution channels, exchange rate fluctuations, terms of payment, national price-setting process/outcome by payors governments
All of which render any direct comparison inappropriate.
Prices are the result of complex evaluation/negotiation processes established by national rules
It is essential that the decision-making process for setting the price is objective and transparent which underlines the importance of the Transparency Directive
A study by Kanavos et al (2011)1 – price differences largely due to the differences in national priorities (even countries with equivalent income), pharmaceutical policies and market regulation
Example of successful differential pricing – vaccines have a differential pricing structure with reasonable market prices in high income countries, low prices in Global Alliance for Vaccines and Immunisations (GAVI) and intermediate prices in middle-income countries2
Danzon and Towse (2003)3 stress that differential pricing allows broader access for patients to innovative products in a sustainable way while promoting innovation
1 P. Kanavos et al for European Parliament, ENVI „Differences in costs of and access to pharmaceutical products in EU”, 2011, available at
2 P. Yadav, “Differential Pricing for Pharmaceuticals, Review of current knowledge, new findings and ideas for action”,
A study conducted for the U.K. Department for International Development (DFID), August 2010, p P.M. Danzon and A Towse (2003), „Differential Pricing for Pharmaceuticals: Reconciling Access, R&D, and Patents" International Journal of Health Care Finance and Economics, 3: , 2003

7. Implications of IRP
IRP – acts as a barrier to price adaptation based on a country’s economic situation
IRP mechanically leads to a stronger price convergence
Some practices of cross-border reference pricing can also contribute to a heavy distortion of prices especially in times of financial crisis e.g. Greece!
This is especially the case in countries where the price is set based on the lowest price in the country basket rather than on the average price in the country basket.
Some practices of IRP may spill-over onto other countries and decrease the global incentives to innovate
Companies may also consider the impact of launching a product in one country on the revenues of the other country

8. Trends and the Future
Austerity is increasingly leading to restrictive pricing policy
These countries should be excluded from country baskets as those prices / rebates are set under exceptional circumstances, may be temporary and should not be exported to other countries
Transparency directive
Official list prices are already made public by Member States
The directive is aimed at guaranteeing transparent procedures and payor decisions for pharmaceutical companies, not final prices
Ultimately, when IRP policy is aggressive, it directly impacts profitability of product launch
Such developments impact the revenues of pharmaceutical companies but also act as a delay to patient access to innovative treatments. The ESMT White Paper (p.17) finds that fewer projects are developed in low-margin therapeutic areas
It is essential to balance the impact of lower prices with the costs associated with less innovation and with fewer products being launched1
1H. Friederiszick, N. Tosini, F. de Véricourt, S. Wakeman, ESMT White Paper, „An Economic Assessment of the Relationship between Price Regulation and Incentives to Innovate in the Pharmaceutical Industry, 2010, available at

9. Price level index for pharmaceutical products in 2005, EU25=100
Source: European Commission Directorate-General for Economic and Financial Affairs (DGECFIN); Cost-containment policies in public pharmaceutical spending in the EU By Giuseppe Carone et al 2012

10. Simulated savings due to a price convergence of countries with above EU level prices to EU level prices
Source: European Commission Directorate-General for Economic and Financial Affairs (DGECFIN); Cost-containment policies in public pharmaceutical spending in the EU By Giuseppe Carone et al 2012

11. Germany – an example of free pricing at launch but a challenging process overall
Germany is the largest EU state by population, the largest EU economy and accordingly the most important market for pharmaceuticals within the European Union. For a long time manufacturers were effectively free to determine the reimbursement price of patented drugs in the German health care system. In recent years, however, pricing and reimbursement in Germany has changed significantly. In January 2011 a new system was introduced to determine the reimbursement prices of new active substances entering the German market. This new system, known as the “AMNOG-System” foresees a 2-step procedure which new medicines have to undergo as soon as they enter the German market.
The AMNOG-System is a quite recent concept (est. 2011) and is considered to be a “learning system” by the German legislator and the administrative bodies involved. Also, in some parts the legal framework governing the system is not very dense and leaves room for interpretation. Accordingly, many aspects are still being shaped and substantiated by court decisions, law decrees and, most of all, the administrative practice of the authorities involved. This website has been designed to support you when navigating the system to prepare the successful launch of innovative pharmaceuticals in Germany.
In , G-BA assessed 99 new technologies and decided 48% of products had no additional benefit, 25% had minor additional benefit, 18% had considerable additional benefit and the remainder had unquantifiable additional benefit. No technologies have been classified as having major additional benefit.
A high proportion of G-BA decisions have been of no or unquantifiable benefit indicating that obtaining a high price in Germany is challenging

12. The UK
A more detailed review

13. Topics An alternative guide to the NHS
It’s not as bad as you think though
Financial background to medicines in UK
NICE consultations, long grass and the doughnut
Rare diseases, HST and Chinese whispers

14. Alternative guide to the NHS

15. It’s not as bad as you think: Compare us to the US

16. PPRS context (pricing agreed on behalf of all UK nations) Total medicines expenditure / growth
Projecting Expenditure on Medicines in the NHS ; Phill O’Neilla, Jorge Mestre-Ferrandiza, Ruth Puig-Peirob and Jon Sussexa ; OHE Research Paper 13/02 April 2013

17. Each of the three other nations in the UK has a slight variation on the English model which impacts on market access
Although funded centrally from national taxation, NHS services in England, Northern Ireland, Scotland and Wales are managed separately
Northern Ireland:
Funded by the NI Executive through its Health Department
The Health and Social Care Board (HSCB) manage funding, commission services, and work with the HSC trusts
The 6 HSC trusts are responsible for management of services at a local & regional level
Scotland:
Managed through 14 health boards
GPs and pharmacy are contracted through health board but work in community health partnerships based on local authority boundaries
Guidance from SMC and SIGN
MTA Guidance from NICE
Southern Ireland:
The Health Service Executive (HSE), responsible for provision of healthcare in Ireland, follows guidance from the National Centre for Pharmacoeconomics (NCPE)
Wales:
Managed through 7 local health boards (LHBs), each deliver NHS services for local area
Wales follow NICE and AWMSG guidance

18. English NHS Organisation – an enormous organisation

19. There are two broad stages to successful market access in England
1. National market access
2. Market access commercialisation
Phase II/III
Launch
Key desired outcomes
Positive NICE (HTA*) and associated national implementation incentives
Local action plan to adopt new product
Desired rate of commercial uptake
* HTA = Health Technology Assessment

20. National market access begins pre-phase III and continues after launch
Stage 1
National market access begins pre-phase III and continues after launch
Go/ no go decision
Go/ no go decision
Key desired outcome: positive NICE HTA and associated national implementation incentives
Before start of phase III or -4 years launch
On start of phase III or -3 years launch
-6 months launch
Post-launch, pre-NICE & post-NICE
Launch +3 months
Launch months
Outcomes/ milestones:
Ensure appropriate endpoints for EMEA and HTA included in Phase III
Selection for NICE appraisal
Flagged for NICE guidelines
On radar of national service development makers
On radar of national clinical opinion leaders
Patient Access Scheme (PAS) price approved
Favourable position in regional HTA guidance
Favourable position in NICE HTA
Favourable position in NICE guidelines, quality standards, and incentives e.g. Quality Outcomes Framework (QOF), commissioning for Quality & Innovation (CQUIN) & National Clinical Guidelines

21. Stage 1
…with a range of decision makers and influencers requiring a joined-up approach across the UK operating company…
Before start of phase III or -4 years launch
On start of phase III or -3 years launch
-6 months launch
Post-launch, pre-NICE & post-NICE
Launch +3 months
Launch months
Ensure appropriate endpoints for EMEA and HTA included in Phase III
Selection for NICE appraisal
Flagged for NICE guidelines
On radar of national service development makers
On radar of national clinical opinion leaders
Patient Access Scheme (PAS) price approved
Favourable position in regional HTA guidance
Favourable position in NICE HTA
Favourable position in NICE guidelines, quality standards, and incentives e.g. Quality Outcomes Framework (QOF), commissioning for Quality & Innovation (CQUIN) & National Clinical Guidelines
NICE
NICE
PharmaScan National Horizon Scanning Centre (NHSC)
Department of health (DoH)
Patient Access Scheme Liaison Unit (PASLU)
PenTAG, GMMMG, Keele, UKMi etc.
Academic pharmacists, KOLs
NICE
Academics decision support units, patient groups, KOLs, Royal Colleges
NICE
Co-opted KOLs
National KOLs
Decision makers
&
influencers:
Typical activities should include:
Global ad boards
Input data into PharmaScan etc.
Meetings with NHSC
1:1 national advocacy development
Ad board to understand real-life NHS affordability/ positioning
Direct contact with DoH, PASLU
Negotiating price with Global
Direct contact with organisations
Bespoke submissions
Write submissions (9-12 months)
1:1s and meetings to create bespoke messages for all stakeholder groups
Co-ordinating processes & feedback with commissioners
National advocacy development

22. Key outcome: desired rate of commercial uptake
Stage 2
Focussed multi-disciplinary market access commercialisation is then essential to drive the desired rate of product uptake
Go/ no go decision
Key outcome: desired rate of commercial uptake
-6 months – 2 years to launch during NHS annual planning cycle deadlines
0-90 days + 3 months post NICE
6-36 months post launch
Milestones:
Local NHS planning cycle has new product on radar and associated impact on budget service configuration planning and local priorities
Local action plan agreed on how product is to be developed
Implementation and monitoring support
For each planning cycle
Review in light of each new competitor
Local CCG/ CSU
PharmaScan, national horizon scanning & regional HTA groups, local clinical KOLs
Continue to input data into PharmaScan etc.
Continue direct contact with regional HTA
Stakeholder mapping & prioritisation of local accounts
1:1 activity with MM & lead commissioners using ABN
NICE & regional HTA groups, local clinical KOLs
Face to face activity from hybrid clinical/ payer role
Tools to help payers identify local cost implications e.g. BIM
Tools to support formulary inclusion (which will be mandated)
Payer educational materials on key concepts for evaluating
Proactive support and facilitation of creating costed pathways, business cases & service re-design
Local CCG/ CSU & clinical team as agreed in local plan
On going clinical/ payer field role face-to-face with MDT
Support on monitoring progress, real world data, case studies, learning sets
Educational support
Joint working and partnership working
Decision makers
& influencers:
Typical activities:

23. The roadmap for new medicines in NHS England may not always be obvious – specialised medicines for example have a range of routes to reimbursement
© Can Stock Photo Inc. / RTimages
NICE Highly Specialized Technologies (HST) Programme
Commissioning Policy
NICE Single Technology Appraisal (STA)
Cancer Drugs Fund (CDF)
Individual Funding Requests (IFRs)
Commissioning Through Evaluation
Consultation for innovative technologies – need to respond to this
Strategically there are many things to be considered as to which direction you may or may not want to go

24. What do NICE do?

25. NICE - Explaining what was meant to change in 2014
Proposed addition of burden of illness and wider societal impact
These value elements are described as ‘modifiers’
NICE Appraisal Committees use these modifiers to help decide whether to recommend a technology with an incremental cost effectiveness ratio above £20,000 per QALY

26. UK example of a changing environment: Wider societal impact now kicked into the long grass
Current UK evaluation requirements:
NHS and personal social services (PSS) perspective
No societal costs included
All societal benefits included (e.g. carer disutility)
The Netherlands evaluation requirements
Societal perspective
Some societal costs: patient productivity losses and unpaid carer costs
All societal benefits included (e.g. carer disutility)
Sweden evaluation requirements:
Societal perspective
All societal costs: patient productivity losses and consumption; unpaid carer costs
All societal benefits included (e.g. carer disutility)
VBA UK evaluation requirements:
Societal perspective
Weightings based on BoI
Wider societal impact based on patient ability to engage with society
Adapted from a slide provided courtesy of FIECON Ltd

27. £14bn NHS England Consultation – Issued 27 January 2015
90 day consultation period
£14bn

28. The Cancer Drugs Fund currently remains outside
In prioritising treatments and interventions for the future financial year, NHS England will observe the following sequence
First Order
NICE TA and HST
Estimated budget impact for NICE approvals in 2015/16 = £270m
Second Order
NHS Constitution delivery requirements which affect specialised services e.g. 18-week wait
Third Order
Developments to support national service strategies e.g. increase access to transplantation
Fourth Order
All other specialised services developments
The Cancer Drugs Fund currently remains outside

29. 2. Planning
3. Building the clinical case
1. Scanning
4. Impact analysis and consultation
5. Governance
Five stages have for treatments and interventions that might typically be commissioned
NHS England. Consultation Guide Investing in Specialised Services. 27 January, 2015

30. Coordinated at a Clinical Reference Group level
Five stages have for treatments and interventions that might typically be commissioned
Coordinated at a Clinical Reference Group level
There are two published outputs from this stage
The list of potential clinical policies that are identified as ‘Not being routinely commissioned’
The list of potential service specifications for commissioning
1. Scanning

31. This will create an Annual Work Programme
Five stages have for treatments and interventions that might typically be commissioned
Where the National Programmes of Care, who coordinate the work of the CRGs into strategic groupings such as cancer, consider the proposals and select the ones that most fit the programme’s strategic priorities
This will create an Annual Work Programme
2. Planning

32. 3. Building the clinical case
Five stages have for treatments and interventions that might typically be commissioned
Building the clinical case: where the Clinical Reference Group works with stakeholders, including patients and the public, to define the clinical proposal
An independent review of clinical evidence will usually be commissioned
Finally, a Clinical Appraisal Panel will form a view whether a clinical case is made
3. Building the clinical case

33. 4. Impact analysis and consultation
Five stages have for treatments and interventions that might typically be commissioned
Where NHS England will develop, using the defined clinical criteria, a service impact analysis and hence a financial impact analysis
This will result in a final policy or service specification that can be considered for commissioning
The scale and duration of consultation will then be defined
Suite of 6 documents
Provisional service specification
Activity projection report
Service impact analysis report
Finance impact analysis report
Draft specification
Engagement report
4. Impact analysis and consultation

34. The NHS England Board approves the prioritisation
Five stages have for treatments and interventions that might typically be commissioned
Where the Clinical Priorities Advisory Group assures the Board that the process has been completed and recommends a priority order of commissioning
The NHS England Board approves the prioritisation
Commissioning against the priorities will be overseen by the Specialised Commissioning Committee
5. Governance

35. NHS England latest draft of the specialised commissioning information pack – our concerns
Equity
'NHS England will not confer higher priority to a treatment or intervention solely on the basis it is the only one available.’
This seems to be disenfranchising patient groups that currently have ‘no hope’
Seems inconsistent with the DH’s own 'innovation health and wealth’ strategy
Timeframe and backlog
NHS England has openly struggled with the backlog of proposed commissioning policies and service developments
We welcome the transparent way that the process is laid out
But framework should not be paralysing

36. NHS England latest draft of the specialised commissioning information pack – our concerns
NICE collaboration
The CRG accountable commissioner will be expected to confirm that there is no planned or in progress NICE appraisal
Little evidence of consistency between the NICE appraisal process and that of the NHS specialised services review process
Companies left with the need to plan for both, due to lack of predictability of the system
Appeal
'The decision itself cannot be appealed.’ and 'A challenge that the correct process has not been followed should be made in letter to the Director of Specialised Commissioning.’
Not clear how such a challenge would be handled and suggests that only a ‘Judicial Review’ style of appeal would be an option?

37. In conclusion
Challenging – companies slowing down their access efforts to ‘test’ markets first
Unpredictable – companies looking to other markets first
Most important things are:
Comparators choosing the wrong one or PBO as comparator can lead to perception of no or little benefit
Clinical outcomes in terms of some surrogates vs. validated or mortality measures – are outcomes meaningful?
Price – it’s not the most important thing, but it becomes increasingly important without 1 and 2

38. Thanks to MAP BioPharma for source material
Christian Hill and Mark Harries
MAP BioPharma